Using this code to programme a fake chip and PIN card, they loaded the chip with malicious software capable of “reprogramming” the reader.

The card can be made to look like a normal credit or debit card in order for criminals to be easily able to use it in shops or cafes.

The malicious card then transfers its software to the reader, which begins storing the details of all subsequent cards inserted.

The criminal then returns later on, using a second malicious card to download the data, including the card numbers and PINs.

A spokesman for the security firm told Channel 4 News: “In our demonstration we just got the card number and PIN, but a real criminal would probably reprogramme the reader to request that the card is swiped.

“This would give maganetic strip data which could be used to clone the card.”

There are more than one million readers in Britain, according to the UK Cards Association, which processes about 800million purchases each month.

Verifone, which producers most of the terminals in Britain, said it is working on an "expedited" update.

A Verifone spokesman told the programme: "Upon reviewing VeriFone’s portfolio we have confirmed that MWR implemented a sophisticated scenario that is technically feasible on some older systems.

"VeriFone has developed a software update to resolve this issue in deployed systems and has already submitted the code for testing and approval on an expedited basis. We informed MWR of those efforts last week.

"Once the approval process is complete, we will provide the software update to all impacted parties for appropriate implementation."